Private car owners are set to pay advance income tax up at least by 67 per cent in the coming fiscal year 2020-2021 as finance minister AHM Mustafa Kamal proposed a hike in tax against registration and renewal of private motor vehicles.
Kamal proposed an increase in tax in the Finance Bill-2020, bringing an amendment to the Income Tax Ordinance-1984.
The cost of registration and fitness renewal of car and four-wheel drive will also go up as he also proposed an increase in the supplementary duty on services provided by the Bangladesh Road and Transport Authority to 15 per cent from the existing 10 per cent.
According to the Finance Bill, the owner of a car or a four-wheel drive, having the engine capacity up to 1500cc, will have to pay Tk 25,000 annually in AIT from FY 2021 in place of the current Tk 15,000.
The tax will go up to Tk 50,000 from the current Tk 30,000 for a car or a four-wheel drive having the engine capacity between 1500cc and 2000cc.
The advance income tax is proposed to set at Tk 75,000 for a car or a four-wheel drive above 2000cc to 2500cc from the current Tk 50,000.
Car or four-wheel drive owners will have to pay Tk 1.25 lakh for having a vehicle above 2500cc to 3000cc and Tk 1.50 lakh for a vehicle above 3000cc to 3500cc instead of the existing Tk 75,000 and Tk 1 lakh respectively.
The tax will go up to Tk 2 lakh for a car or a four-wheel drive having the engine capacity above 3500cc from the current Tk 1.25 lakh.
The advance income tax for a microbus is proposed to set at Tk 30,000 in place of the current Tk 20,000.
According to the income tax law, the rate of tax is 50 per cent higher for each additional motorcar if the owner has two or more motorcars.
The AIT is not refundable but adjustable with applicable taxes from other sources.
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